Russia’s Richest Man Proposes to Develop a Palladium-backed Cryptocurrency

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by Bhushan Akolkar · 3 min read
Russia’s Richest Man Proposes to Develop a Palladium-backed Cryptocurrency
Photo: Wikimedia Commons

The Russian billionaire Vladimir Potanin says that it would be a great idea to tokenize metals and commodities and says that there a huge appetite for metal-backed cryptocurrencies.

While Russia has been struggling to introduce crypto regulations, the country’s richest man has come forward with a new proposal. Vladimir Potanin, the Russian billionaire has proposed to launch new crypto tokens pegged to the precious metal of palladium.

The concept of stablecoins i.e. a crypto token backed by fiat currencies is getting more popular these days. Thus a digital currency backed by a precious commodity can likely be a good consideration. Also, the tokenization of commodities would make it easy to trade them globally. As reported by Bloomberg, Potanin said:

“Transactions in tokens are simpler and more convenient. People more and more tend to use decentralized networks and platforms that don’t have the main operator. We want to be active participants of this process.”

A Word With the Swiss Regulator

Potanin is the chief of Norilsk Nickel, a nickel and palladium mining company, with over $18 billion net worth. The Russian business tycoon plans to launch several digital platforms, including the one that facilitates palladium-backed crypto trading. Also, Potanin wants to promote the use of cryptocurrencies in Russia under proper regulatory measures.

Potanin plans to invest nearly $5-$6 million to launch all the digital platforms. Furthermore, he also estimates that the operational costs of these platforms every year could be millions of dollars. But Potanin notes that “If we succeed, the effect will be enormous.”

During a recent interview in Moscow, Potanin said that his company is currently in talks with the Swiss regulators. The Russian billionaire plans to issue the new digital token through the Switzerland-based Palladium fund. Later, he also plans to expand his crypto portfolio expanding the concept to other metals.

Besides, Potanin is reportedly working with Russian central bank and lawmakers to create a framework for regulating the crypto trading platforms. For this Russia first needs to pass a law on digital financial assets. The next regulatory hearing is scheduled for April 2019. Potanin hopes for a positive outcome by this summer for him to start his project by the year-end.

“The main problem of the draft is that it says that digital platforms should be run by banks and exchanges only,” Potanin said. The Russian billionaire believes this should change. He notes that a digital platform can have utility for several things, and that won’t be always in the interest of exchanges and banks.

Banking on the Blockchain Revolution

The use of distributed ledger technology like blockchain is growing tremendously across different business verticals, especially in the commodities and industrial sector. It looks like Potanin doesn’t want to miss out on the opportunity and stay ahead of the game.

The Russian billionaire notes that he has already shared the idea with a few clients and received positive feedback. He says that there’s a healthy appetite for metal-backed digital currencies in Russia.

However, when it comes to the adoption of decentralized digital currencies like Bitcoin (BTC), things are not the same. Russian cybersecurity expert and CEO of Kaspersky Labs Eugene Kaspersky calls cryptocurrencies a great idea. However, he doesn’t think that the world is ready for it.

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